Walmart’s index: A real-life toy story

April 17, 2013
Is My Little Pony sustainable?

Is My Little Pony sustainable?

This is the third in a series of stories about Walmart’s supplier sustainability index. An overview is here, and a story about flour, bread and agriculture is here. Today’s topic: plastic toys and PVC.

Walmart wants to improve the sustainability of plastic toys. The giant retailer isn’t playing around.

The company wants to improve the safety of workers who make the toys. It wants to make sure that manufacturers are taking steps to use fewer so-called “chemicals of concern” in toys. It would like suppliers to deal with any issues raised when kids outgrow Barbie or GI Joe and throw them away. If paper or wood goes into toy packaging, Walmart wants to know whether it is “sourced in accordance with a credible certification system that addresses ecosystem impacts and biodiversity.”

Some critics think Walmart is taking this too far. That’s what this story is about.

Walmart’s supplier sustainability index, which is being rolled out to thousands of suppliers, is the biggest environmental initiative in the company’s history.  It will likely do enormous good–requiring companies that make consumer products to examine their environmental impacts in ways they have never done before. But the index also raises questions about how the world’s largest retailer (2012 revenues: $469 billion) is exercising its market power.

Is Barbie toxic?

Is Barbie toxic?

Consider, as an example, PVC, or polyvinyl chloride plastic, commonly known as vinyl. It’s a widely-used plastic, and it shows up in toys, including such iconic plastic toys as Hasbro’s My Little Pony and Mattel’s Barbie. It can be made soft or rigid, it’s rugged, moldable, low-cost and excellent at holding color.

What, if anything, is wrong with PVCs? That depends on who you ask. [click to continue...]

Filed Under: Climate Change, Consumption, CSR, Energy, Environment, Health, NGOs, Sustainability, Transparency, Workplace Tagged With: , , , , , , ,

Walmart’s index: Better than sliced bread?

April 16, 2013

flourvertical

This is the second in a series of three stories about Walmart’s supplier sustainability index. An overview of the index can be found here. 

Can Walmart change the way wheat is grown in America?

The company is trying to do just that. Here’s how.

Start inside a Walmart store in Laurel, Maryland. On sale here are nearly 40 brands of flour, many more varieties of  bread and countless other products made from wheat, including cookies, cakes, crackers andpancake mix.

In theory, Walmart has influence over every one of those products. The giant retailer (2012 revenues: $469 billion) sells more groceries than any other supermarket chain. Brands like Pepperidge Farm and Arnold and Sara Lee need access to its shelves.

To make agriculture more sustainable, Walmart has begun asking its suppliers probing questions about the grains they use. What percent of your grain is provided by suppliers that track fertilizer use and have goals and a program in place to optimize fertilizer use? What percent of your grain is provided by suppliers that monitor soil fertility and have goals and a program in place to minimize soil degradation and erosion? What about fuel use? What about water? What about pesticides? What about managing biodiversity?

Whew.

For the flour and bread makers, this is new territory.  Most never deal with the farmers who grow their wheat. They buy from middlemen.

“When you run into production agriculture, with thousands of growers, the product is commingled, it’s by definition a commodity,” says Fred Luckey, a retired Bunge executive who is now chairman of Field to Market, a nonprofit group that is working with Walmart.

Now they have to did deep into their supply chains, if they want to stay in the good graces of Bentonville. No company has ever tried anything like this before. [click to continue...]

Filed Under: Climate Change, Consumption, Energy, Environment, Food, NGOs, Sustainability, Transparency Tagged With: , , , , , , , , ,

Walmart’s index: This is big. Really big.

April 15, 2013
A Walmart with LED lights

A Walmart with LED lights

This is the first of three stories about Walmart’s supplier sustainability index.

Since launching its sustainability program in 2006, Walmart has reduced energy consumption in its stores, installed solar panels on its rooftops, curbed emissions from its trucks and recyled millions of tons of its trash. Now that the world’s biggest retailer has streamlined its own operations, it is turning its attention elsewhere–actually, almost everywhere.

Since last fall, Walmart has rolled out what it calls a supplier sustainability index to thousands of suppliers, asking them pointed questions about their operations and prodding them to better understand and manage their own supply chains.

It’s Walmart’s most ambitious environmental project ever, and if all goes according to plan, it will change the way all kinds of consumer products–clothes, toys, electronics, food and beverages–are made. The typical Walmart stocks 125,000 to 150,000 products (!), and the envirommental and social performance of most of the companies that make them them will soon be rated and ranked in Bentonville.

So Walmart is asking lots of questions of its suppliers. Among them:

How can wheat be grown with less water and fertilizer? How can chemicals of concern be removed from toys? What mining practices were used to extract copper, gold and silver for computers or jewelry? What percentage of your televisions sold last year were Energy Star certified? Do the grapes in a bottle of wine come from a farm with a biodiversity management plan? How much water was needed to produce those polyester pants?

If this sounds like a massive and fiendishly complicated undertaking, well, it is. It has been in the works since 2009, when Walmart unveiled The Sustainability Consortium, a nonprofit coalition led by the University of Arkansas and Arizona State University that was set up to provide scientific research to undergird the effort. Since then, a few other retailers (Tesco, Kroger, Ahold, Best Buy) and dozens of consumer products brands (Coca-Cola, Disney, Kellogg’s, Mars) have signed on to the consortium. [click to continue...]

Filed Under: Consumption, CSR, Energy, Environment, Food, NGOs, Sustainability, Transparency, Uncategorized, Workplace Tagged With: , , , , , , , ,

Verlasso: Farming salmon the right way

March 10, 2013

salmon“In the fish counter, all the salmon are dead, all the salmon are red, and none of them can tell a story. It’s incumbent on us to tell the story.”

That’s Scott Nichols, the director of Verlasso. Verlasso, a joint venture of DuPont and AquaChile, farms salmon in Patagonia, and seeks to do so in a responsible way. So Scott has a story to tell.

“We feel a tremendous urgency to get this right,” Scott said, when we met recently in Washington. “We have to learn our way into it. We don’t have all the answers, and we may not have all the questions.”

Scott Nichols

Scott Nichols

A PhD. biochemist who studied business at Wharton, Scott, who is 57, never expected to find himself in the business of fish farming. But as he researched new business opportunities for DuPont in the mid-2000s — he had earlier worked on improving the productivity of maize and beans and on Sorona, the company’s plant-based fiber — he got interested in salmon aquaculture. Aquaculture was booming, for obvious reasons: demand for fish is growing, and the supply of wild-caught fish is flat. The problem, was, salmon aquaculture then and now usually relies upon fish feed made in part from forage fish, such as anchovies, herring and sardines. About four pounds of wild-caught feeder fish are typically needed to produce the fish oil to make one pound of salmon, according to Verlasso. So salmon aquaculture, rather than easing pressures on the ocean’s stocks of wild fish, was actually making things worse.

“The system was broken,” Scott said.

Scientists at giant DuPont (2012 revenues: $35 billion) discovered that they could substitute a genetically-engineered yeast for the fish oils, and preserve the [click to continue...]

Filed Under: Consumption, Environment, Food, NGOs, Sustainability, Transparency Tagged With: , , , , , , , ,

RSF Social Finance: Making money, making change

February 17, 2013
Happy customers of Revolution Foods

Happy customers of Revolution Foods

If you have a few extra dollars in savings, and you’d like to earn more than 0.00001% interest or whatever it is your bank or money market fund is paying, and you’d like to support socially-conscious businesses, you’ll want to take a look at RSF Social Finance.

RSF Social Finance is a financial services organization of modest means (about $145 million in assets under management) that is bursting with big ideas and bold rhetoric. It calls itself “a leader in building the next economy.” It seeks to generate “social and spiritual renewal through investing, lending and giving,” Its mission is to “transform the way the world works with money.”

Whew. What’s going on here?

To find out, I visited RSF Social Finance’s offices in the Presidio complex in San Francisco last week to talk with Don Shaffer, the organization’s president and CEO.

At the simplest level, RSF looks and acts very much like a bank: Its flagship product, the Social Investment Fund, takes deposits and makes loans to so-called social enterprises, a term that’s widely (and often carelessly) thrown around to describe businesses or nonprofits whose intention is to improve society and the environment.

Deciding what qualifies as a social enterprise is subjective, at best. That said, the RSF Social Investment Fund supports companies and nonprofits that, by all appearances, do great work. Among them: [click to continue...]

Filed Under: Consumption, CSR, Environment, Food, Investing, Social Entrepreneurs, Socially Responsible Investing, SRI, Sustainability, Transparency Tagged With: , , , , , , , , , ,

John Mackey: Hippie, libertarian, CEO

February 12, 2013

imageThe top executives of big publicly-traded US companies, in my experience, tend to be rather drab fellows (nearly all are men) who choose their words carefully, hew carefully to the middle of the road in their thinking and rarely say (or do) anything outrageous.*

Not John Mackey, the founder and co-CEO of Whole Foods Market. For better and occasionally for worse, Mackey is an original, who doesn’t run his company by any conventional management book.

Instead, he has written his own book, called Conscious Capitalism: Liberating the Heroic Spirit of Business, with co-author Raj Sisodia, an academic affiliated with Bentley University. It’s a good read, especially because of the insights it delivers into the unusual culture and practices of Whole Foods, as well as into Mackey’s own evolution.

Some examples from the book: [click to continue...]

Filed Under: Books, Business Ethics, Climate Change, Consumption, Economics, Environment, Food, Leadership, Media, Politics, Sustainability, Transparency, Uncategorized, Workplace Tagged With: , , ,

Who’s responsible for factory conditions in poor countries? Has CSR gone too far?

January 6, 2013

garment-factoryJust who is responsible for the fire in a garment factory in Bangladesh that killed more than 100 workers in November?

The factory owner? The government of Bangladesh? US and European brands and retailers who bought the clothes made there? Shoppers who demand the latest styles at low prices?

And who deserves credit for the improvements in working conditions at Foxconn, China’s largest employer and Apple’s biggest supplier?

Apple? The Chinese labor market? Journalists at The New York Times?

Similar questions could be asked about paint factories that discharge pollution into rivers, toy factories that use dangerous chemicals or factories everywhere that run inefficient equipment or burn dirty fuels.

For nearly two decades, a core belief of the social-responsibility movement  has been that western brands and retailers must take responsibility for the social and environmental performance of the factories in their supply chain. This has created an immense infrastructure–an industry, really, of consultants who write codes of conduct for those factories, inspect the factories, report on them and deploy a combination of carrots and sticks that, at least in theory, bring about improved performance.

In essence, US and European brands have become quasi-governmental, undemocratic standards setters and enforcers of social and environmental norms.

So how’s it working? The year just past put a spotlight on a glaring failure of that system–the fire in Bangladesh, where factory conditions in the garment industry are widely deemed to remain unsafe–and on what has been cited as one of its successes–the new transparency of Apple’s supply chain, and the improved conditions at Foxconn, which supplies HP, Sony, Dell and other electronics companies, as well as Apple. [click to continue...]

Filed Under: Business Ethics, Consumption, CSR, Economics, Environment, Global Poverty, Health, Human rights, Sustainability, Transparency, Workplace Tagged With: , , , , , , , , ,

2012′s green business heroes

December 23, 2012
Bill McKibben does the math

Bill McKibben does the math

Some say, and with reason, that 2012 was the best year ever. Never in the history of the world has there been less hunger, less disease and more prosperity. Of course there’s plenty to worry about–the fiscal cliff, gun violence, chaos in Syria and the Congo–as always there will be. But, to paraphrase Martin Luther King, the long arc of history bends towards a more just and sustainable world.

In the little corner of the world that occupies much of my attention–the places where business and sustainability intersect–it has not been a good year. Global greenhouse gas emissions continue to rise. We’re burning more coal, oil and gas than ever. Policy is stuck, in the US and internationally. This will be the hottest year on record in the US, and still people don’t accept the science of climate change. Go figure.

That said, in this final blogpost of 2012,  I’d like to salute some people (again, mostly from the world of business and sustainability) who fought the good fight during the year  just past. Some are business people, others are politicians, activists and even journalists, but they are all doing what they can to bend the arc of history. They’re my green business heroes for 2012. [click to continue...]

Filed Under: Climate Change, Energy, Environment, Media, NGOs, Politics, Sustainability, Transparency, Uncategorized Tagged With: , , , , , , , , , ,

Sorry, wrong number: AT&T’s recycling claim doesn’t add up

December 5, 2012

Sprint is not the biggest cell phone company, but it is the most environmentally-friendly by most accounts. Sprint ranked No. 3 of all US companies in Newsweek’s annual Green Rankings, well ahead of rivals AT&T (28) and Verizon Communication (54). It offered in-store recycling of mobile devices before AT&T or Verizon. And when an independent research firm, Compass Intelligence, compared the recycling and reuse programs of the major carriers, Sprint came out on top. What’s more, Sprint’s CEO, Dan Hesse, personally has led the company’s efforts, as I learned when we met a couple of years ago. [See my 2010 blogpost, CEO Dan Hesse: Sprinting towards sustainability.]

So I was puzzled to see a recent AT&T press release with the headline: AT&T Customers Break World Record for Recycling Wireless Devices. The release said:

By recycling 50,942 devices during a one-week period, AT&T* customers broke the world record for collecting the most wireless devices in a week as certified by Guinness World Records.

It also noted AT&T collected about three million cell phones for reuse and recycling in 2011. The release got a lot of attention, and was widely and uncritically covered–here at the Mother Nature Network, here at Treehugger, at Environmental Leader and elsewhere.

There’s just one problem.

This so-called world record is all but meaningless. Sprint almost surely recycles a lot more cell phones than AT&T, although direct comparisons are impossible.

Consider: AT&T says it collected 3 million cell phones for reuse and recycling in 2011. Sprint says it collected 11 million in 2011–an average of more than 200,000 a week, easily topping AT&T’s so-called record. [click to continue...]

Filed Under: Business Ethics, Consumption, CSR, Environment, Sustainability, Transparency Tagged With: , , , , , , , , , ,

Best Buy: Sustainability amidst turmoil

September 30, 2012

Best Buy has made headlines this year, and not the kind that any company wants:

Best Buy Cutting 50 Stores to Get Profitable. Good luck with that. (Forbes)

Best Buy CEO Resigns Under Cloud (Minneapolis StarTribune)

Best Buy Suffers For Lack of a Plan (New York Times)

Best Buy in Turmoil: Will It Survive? (Forbes, again)

Best Buy is losing market share to Amazon, its stock is down by 25 percent since the beginning of year (while the S&P 500 is up by 15 percent) and the company’s  founder Richard Schulze stepped down as chairman because he failed to tell the board about allegations that then-CEO Brian Dunn was having an inappropriate relationship with a female employee. Now Schulze wants to take the company private, maybe with money from Qatar. It’s more than enough to paralyze an organization or, at a minimum, distract everyone.

So how are the company’s sustainability efforts going? As it turns out…very well. [click to continue...]

Filed Under: Consumption, CSR, Energy, Environment, Sustainability, Transparency, Workplace Tagged With: , , , , , ,
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